Tesla’s Stock Falls Despite Record Revenue
Tesla (TSLA) reported its Q3 earnings after the bell on Wednesday, missing analysts’ expectations on revenue but slightly beating on earnings. The automaker reported revenues of $21.5 billion(56% YOY growth) and earnings per share of $1.05 (Non-GAAP). However, the automaker’s shares fell more than 5% following the announcement.
Tesla’s stock was down in after-hours trading post earnings call seemingly because of the miss on revenue expectations, but Tesla technically delivered record revenue, operating profits, and free cash flow. The Company said that while it expects 50% annual growth in production, its deliveries may only grow by just under 50% due to an increase in cars in transit at the end of the year.
Tesla says it’s facing year-over-year headwinds from the increased cost of raw materials and inefficiencies at its Gigafactory Berlin**. A strengthening dollar* also impacts Tesla’s sales abroad, cutting into profitability. Even still, Elon suggested Tesla’s market value could surge more than six-fold to over $4.4 trillion and teased up to $10 billion of stock buybacks next year.
50% annualized growth for the foreseeable future?
“We believe Tesla will continue to grow deliveries and revenue production at a 50% or greater compound annual growth rate. It might occasionally be a year that is a little less, and then some years would be maybe a little more or a lot more. In some of our out-year planning, we see potential annual growth rates that are in excess of 50%.” — Elon Musk
Tesla’s Production and Delivery Numbers Continue to Increase
In the second quarter of 2022, Tesla produced over 258,000 vehicles and delivered over 254,000. June 2022 was the highest vehicle production month in Tesla’s history. In contrast, in the third quarter of 2022, Tesla produced over 365,000 cars and delivered over 343,000 vehicles.
The Company’s Plans for the Next Five Years
Tesla’s head of investor relations, Martin Viecha, spoke at the Goldman Sachs’ tech conference in San Francisco on Monday. He discussed the Company’s plans for the next five years, focusing on battery supply, technology, and the cost of making vehicles. He noted that the industry will grow as fast as battery supply allows and that Tesla is working to reduce the per-vehicle manufacturing cost. He also said that Tesla is working on a cheaper electric vehicle and a robotaxi service.
Pepsi to Receive Tesla’s Electric Semi Trucks
Lastly, Tesla has started production of its Tesla Semi electric trucks, and Pepsi will be the first Company to receive them, with 15 trucks set to be delivered to Pepsi’s Modesto, California facility on December 1. The Tesla Semi is an all-electric class 8 truck that was unveiled in 2017. It has a range of 500 miles (805 km) on a single charge and is significantly more efficient than diesel trucks, with a cost of operation per mile of only $0.40. If successful, the Tesla Semi has the potential to electrify the trucking industry quickly and significantly reduce emissions from freight transport.
In conclusion, Tesla’s stock falls 5% after reporting Q3 earnings, missing analysts’ expectations for revenue. Tesla delivered record revenue, operating profits, and free cash flow. The Company is growing rapidly and working on new and innovative projects and Elon believes Tesla’s market cap can rise to $4+ trillion even though the stock fell.
*When the dollar strengthens, products become too costly for global consumers to buy, and demand weakens domestically and globally. So investors shouldn’t expect corporate profits to stay at record levels.
**Tesla reportedly has issues with battery cell production at Gigafactory Berlin and has thus far been unsuccessful in achieving volume production of the 4680 battery cell. The Company is now moving manufacturing equipment to Texas to focus on successfully deploying its dry coating process there. This move is a setback for Tesla’s long-term goal of establishing battery cell production at Gigafactory Berlin.
This article was created using bundleIQ
